Haw Par (HAWPF, HAWPY) is a Singapore based conglomerate that is trading at a discount to net asset value. The company has been around for over 100 years and has holdings in real estate, theme parks, health care, and other investments. It is held by several value funds.
There are 219 million shares and the market cap is SG$2 billion ($1.477 billion). It takes 74 cents to buy one Singapore dollar. In 2015, there was an ordinary dividend of SG14 cents and a special dividend of SG15 cents. The ordinary dividend yield is 1.53%.
Haw Par has four divisions. The first is the Healthcare Division, which sells Tiger Balm Ointment. The second division owns an underwater theme park in Thailand. The third division, like most Asian conglomerates, is real estate. The last division is an investments division that holds shares in several Asian companies.
The value of Haw Par’s stock holdings are the following: 70.4 million shares of United Overseas Bank (UOVEY, UOVEF) worth SG$1.37 billion ($982 million), 43.6 million shares of UOL Group (UOLGF, UOLGY) worth SG$251 million ($186 million), and 68.8 million shares of United Industrial Corp. (UILCF, UIELF) worth SG$190 million ($140 million). There’s SG$1.696 billion ($1.25 billion).
The healthcare division made SG$15.166 million in the first quarter of this year. I’m going to assume that its run rate is the same for the rest of the year and then assume it trades at 20 times earnings. This division would be worth SG$1.2 billion ($900 million) easily.
The Yaw family owns 36% of the stock, First Eagle 14%, and United Overseas Bank 10%. There’s not a lot of information that an American can find on Haw Par, but the Motley Fool in Singapore gives some background in an article found here. It tells the story of the company going back to the 1800s and World War II.
So as of the most recent quarter, tangible assets are SG$2.59 billion ($1.91 billion) and liabilities only SG$152 million ($112 million). That gives us a tangible book of SG$2.438 billion ($1.8 billion) at SG$11.13 a share. Shares are trading at SG$9.12 for a discount of 18%. I strongly suggest that you read this report from Evaluate Research. Evaluate has a target price of SG$15. The report is dated April 22, 2016. Here’s a fellow who thinks the sum of the parts of SG$16.40.
A few months ago, Haw Par closed its underwater theme park in Singapore. Part of the reason is that its lease ran out.
The stock is thinly traded in the U.S. on the pink sheets. There’s not a lot of information out there, which is why I wanted to write the article. I found Haw Par by looking at IVA’s list of holdings. If you have a diversified portfolio of stocks trading at discounts to NAV, this could be an interesting stock. However, it might take a long time for that discount to close or underlying NAV to grow. Having said that, it’s an interesting company.
We do not own shares.
